Delay possible in Oregon state worker incentive program

by:
Nichole GunnFebruary 29, 2012

A new employee incentive program may be in the works for Oregon state employees, but it could face delays as the cost remains disputed.

According to the Statesman Journal, consultants to the Public Employees' Benefit Board said in a recent report that delaying implementation of the Oregon state workers' wellness program could cost the state as much as $47 million over the next decade.

Directors of the PEBB now plan to meet to decide whether or not to suspend the the $20 to $35 monthly penalty imposed on those who will not participate in the new Health Engagement Model for 2012, but the report argues that suspending the penalty will cause participation in the wellness plan to drop significantly, which could delay the expected savings PEBB stands to profit from by implementing the incentive program, the newspaper states.

"Mercer recommends the HEM deduction remain in force," the report from Mercer, an actuarial firm, reads. "Reductions in member's health risks through health engagement programs can moderate healthcare trends in years to come."

The firm also predicts it would cost PEBB as much as $9 million each year if it transformed the monthly penalties for non-participation into cash incentives paid to those who do take part in the program, because participation would drop by as much as half.

"PEBB had no budget for incentives," the report states, adding its support for the penalty approach. "An incentive approach would have required large benefit cuts. Negative incentives offered the best participation rates to assure program success."

However, PEBB recently released a report listing the advantages to be gained from delaying penalties for lack of program participation. According to the newspaper, delaying the penalties would relieve members of further financial impact, give the PEBB more time to relay the details related to the incentive program and allow it to review the structure behind the program and incentives offered.

Companies everywhere, large and small, are implementing employee incentive programs rooted in wellness initiatives. The purpose of these programs is to increase workforce morale and productivity while reducing the number of sick days taken and giving employees a tangible reason to participate.

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